Over the past few years, there has been a steady but slow rollout of mobile payment options for both consumers and retailers to adopt. At this point in the process, it seems to be getting to the point that consumers are generally on-board with or at least aware of their mobile payment options, and it's retailers that might need to play a little catch-up.
Industry data suggests that mobile payments will clear $1 trillion in sales, more than double the number observed in 2015, according to the Wharton School of Business at the University of Pennsylvania. With this in mind, it's vital for merchants to consider the benefits of adopting. However, some may be reticent to do so because they haven't really seen a decline in card-based transactions even in the face of the EMV transition.
What's the issue?
It's worth noting, though, that basing decisions on these kinds of ebbs and flows in consumer preference might not always be the best idea, because it will often leave merchants at least a little behind the times, the report said. But with that having been said, mobile payments in the U.S. are still in their relatively nascent stages, and merchants might have some time before widespread adoption forces their hands and traditional payment cards are out of favor with shoppers.
"No form of payment has ever gone away since the invention of currency, and cards are the payment standard right now," Thad Peterson, an analyst with the Aite Group, told Knowledge @ Wharton. "They work and people understand them. Mobile will take its place in the payments ecosystem, but it will be a while and it's likely that cards and mobile will co-exist for some time to come."
What comes next?
It's also vital for merchants to be forward-looking in this regard because smartphone manufacturers have a growing stake in the mobile payments game, according to a report from eMarketer. Companies like Apple and Samsung have launched their own processing platforms with varying results, but will likely use their forthcoming tech releases to further encourage consumers to get on board with these payment options.
Data suggests that the value of mobile payments in the U.S. alone could reach more than $314 billion by 2020, making up a large and growing portion of all purchases, the report said. These may be particularly common for purchases of middling value; by 2020 they could make up almost 70 percent of all mobile transactions, up from this year's 52 percent. Meanwhile, high-value transactions should likely change little, coming in at 19.4 percent of all mobile purchases in 2020, compared with 21.2 percent this year.
Consequently, the earlier merchants can take the step to adopt the latest point-of-sale devices, capable of handling both EMV and magnetic strip card purchases - and mobile transactions as well - the more likely they will be to seize on whatever trends emerge for these various payment types in the years ahead.